The Kurdistan Regional Government (KRG) Prime Minister Nechirvan Barzani has attended the ceremony of opening Standard Chartered bank first branch in Erbil, attracted by financing opportunities for large government infrastructure projects planned in the autonomous region.

Mr. Barzani outlined the need for an improved banking sector in Kurdistan. He said,

“I believe the time has come for us to seriously examine international financial practices and carefully consider how modern banking can help families and businesses to manage their wealth … I have no doubt that the presence of Standard Chartered will help us move forward in this regard.”

The bank is one of a small number of foreign lenders with operations in Iraq, which is experiencing rapid oil-fuelled economic growth. Standard Chartered opened its country head office and first branch last November in Baghdad's banking district, on a street lined with blast walls and patrolled by guards with Kalashnikov rifles.

Mr. V. Shankar, the Standard Chartered CEO for Europe, the Middle East, Africa and the Americas, said the company comes “with glitter in our eyes” and stated his optimism for the bank’s activity in the Region.

Kurdistan is relatively peaceful by contrast, and the autonomous region's main cities are full of cranes and construction sites. The bank also plans to open another branch in the southern oil hub of Basra later in 2014.

Chief Executive Officer of Standard Chartered Iraq Gavin Wishart told Reuters that the business environment in Kurdistan was "progressive" and described the pace of development as "encouraging".

Britain's Standard Chartered bank will open its first branch in Iraqi Kurdistan early next month, attracted by financing opportunities for large government infrastructure projects planned in the autonomous region.

The bank is one of a small number of foreign lenders with operations in Iraq, which is experiencing rapid oil-fuelled economic growth, but also its worst upsurge in violence in at least five years.

Standard Chartered opened its country head office and first branch last November in Baghdad's banking district, on a street lined with blast walls and patrolled by guards with Kalashnikov rifles.

Kurdistan is relatively peaceful by contrast, and the autonomous region's main cities are full of cranes and construction sites.

The bank also plans to open another branch in the southern oil hub of Basra later in 2014.

Chief Executive Officer of Standard Chartered Iraq Gavin Wishart told Reuters that the business environment in Kurdistan was "progressive" and described the pace of development as "encouraging".

Security concerns and a complex regulatory and political environment have put some international firms off doing business there. HSBC is trying to exit Iraq by selling its stake in Dar Es Salaam Investment Bank.

"We hope that as the financial services sector develops, we can be the partner of choice in that area," Britain's Ambassador to Iraq Simon Collis said at a news conference during his visit to the Kurdish capital Arbil on Thursday.

Iraq's federal government and the Kurdish region are in dispute over how to exploit the country's vast hydrocarbon reserves and how share the proceeds.


Source

International companies are overlooking security worries and a recent spike in violence to set up shop in oil-rich Iraq, a country that was engulfed in a civil war only five years ago.

Lured by the country’s vast oil wealth and sizzling growth rates, international companies have in recent months launched or expanded operations in Iraq’s finance, agriculture and construction sector as well as in the energy industry that is the mainstay of the country’s economy.

PwC, the professional services firm, said its Iraq business had grown by 30 per cent over the past year as international and Iraqi companies race to bolster their presences in a country that is Opec’s second-largest oil producer, despite a slight drop in output in 2013 because of sabotage and ageing infrastructure.

“If you look at the region, Iraq is one of the few promising emerging markets out there,” said Ismail Maraqa, a PwC senior partner overseeing Iraq operations. “The business opportunities are huge. They are trying to grow the oil sector by six or seven times.”

The renewed business interest coincides with an uptick in violence rooted in political tensions between the dominant Shia and minority Sunnis and Kurds, as well as spillover from the civil war in neighbouring Syria. At least 659 Iraqis were killed and 1,373 wounded in political violence in November. In December, gunmen shot dead 15 Iranian workers at an oil pipeline east of Baghdad, a rare case of foreigners being targeted in the country’s overlapping conflicts.

And the violence shows no sign of letting up. Suspected Sunni Islamist militants on Christmas day set off three bombs in the heavily Christian Dora district of the capital, killing at least 38, including 24 who died at the conclusion of a church service. Western regions of the country were on edge on Sunday after the Shia-dominated government’s security forces arrested a popular Sunni lawmaker and killed his brother and five guards in a raid.

But Iraq’s economic potential is trumping security worries. After decades of socialist policies that scared off private investors, 12 years under harsh international sanctions and more than a decade of civil strife, Iraq’s economy has expanded dramatically. Its gross domestic product has doubled since 2003 to above prewar levels. Over each of the past two years, the economy grew more than 8 per cent, according to the World Bank, and Iraq’s central bank predicts even higher growth.

“I think there’s a big potential here. The future is bright,” said Mozhar Mohamed Saleh, an adviser to the central bank and professor of finance at two major Baghdad universities. “But because the security situation is not very good, it’s a hazy picture.”

Iraq’s relatively safe Kurdish north has long attracted foreign investors, especially companies from Turkey, Iran and the Gulf states. But interest in the rest of Iraq has increased, especially since the 2008 departure of US troops, said Lady Emma Nicholson, executive chairman of the Iraq Britain Business Council. The trade organisation’s 54 members, up from 43 last year and 39 in 2011, include Deloitte, ExxonMobil and an affiliate of Caterpillar. Citigroup said in June that it would open an office and three major Lebanese banks – Byblos, BankMed and Bank Audi – have opened or are about to open branches in Iraq.

The bulk of the new interest remains in Iraq’s lucrative energy sector. But companies are examining other sectors. “In the past it was only oil and gas,” said PwC’s Mr Maraqa. “Now you have construction, communications, banking, lawyers, healthcare, education.”

Security concerns remain the most severe impediment to further investment and eat into profits as companies must hire armed guards and buy armoured vehicles.

“We have opened the door for these companies and encouraged them to come by explaining what the security situation is, the measures we take to protect our visitors and the measures the companies that invest take on the ground,” Lady Nicholson said. “Iraq is not in a settled neighbourhood but it’s doing very well. There are many safe areas where you can do business, and one or two hotspots that I’d advise you not to go to. It’s a question of knowing the territory.”

But beyond security, Iraq remains a difficult regulatory environment to navigate. The government of prime minister Nouri al-Maliki has advanced efforts to reform laws to make it easier for foreign companies to set up shop and repatriate their profits. But the country’s administrative culture has changed little from the time of Saddam Hussein, who kept Iraq an isolated backwater for decades.

“Though the environment has improved somewhat, the actual bureaucracy is a problem. It’s part of the cost of doing business,” said Mr Saleh.

Despite the challenges, companies are making calculated risks to do business in Iraq. Standard Chartered, which opened a branch in Baghdad last month, is scheduled to open branches in the northern city of Erbil this month and the southern port city of Basra next year.

At the Baghdad’s branch’s inaugural ceremony, attended by Mr Maliki and other officials, the bank’s Iraq chief executive Gavin Wishart said large-scale planned state infrastructure projects would require international financial mechanisms. The Maliki government, which may be voted out in April elections, has allocated $860m for low-cost housing in 2014 alone, as well as investments in new roadways, railways and bridges.

“We are optimistic about the prospects of the Iraqi economy,” Mr Wishart said. “As an international bank, we believe there is substantial opportunity to play a leading role in the economic development of the country.

Source

The first branch of a British bank in Iraq will be officially opened by the country's prime minister today in what is being billed as a significant milestone in its recovery.

The branch of multinational banking and financial services company Standard Chartered will be opened in the capital Baghdad at an official ceremony attended by Prime Minister Nouri Al-Maliki.

The ceremony, which will also be attended by British Ambassador to Iraq Simon Collis, marks the arrival of the first of three Standard Chartered branches in Iraq, with another in Erbil to follow by the end of this year, then one in Basra next year.

The bank, which has its headquarters in London, has over 1,700 branches in more than 70 countries and is the first UK-based bank to open a branch in Iraq.

The move is a bid to meet increasing demands from global clients in the country from areas including oil, telecoms and infrastructure.

It is being billed as a milestone in the development of Iraq following years of conflict, but comes amid a growing surge of terror attacks that have swept across the country since April, including reports of a double suicide bombing at a military base north of Baghdad last night.

At today's opening ceremony, Mr Al-Maliki and Mr Collis will be at the Standard Chartered branch in Arrasat in Baghdad, along with the governor of Iraq's Central Bank Dr Abdulbasit Turki, and the chairman of its National Investment Commission, Dr Sami Al-Araji.

Standard Chartered has had a representative office in Erbil since 2006 but today's opening brings its first branch office, capable of full client banking, to Iraq.

The bank will help the Iraqi Government, its ministries, and the Iraqi Central Bank in a specialist advisory role, as well as helping Iraqi public sector banks, private banks, and local corporate companies.

A team of Iraqi staff have already joined the bank's team of experts and will continue to grow as the bank develops more services in Iraq.

The bank has said it hopes that its presence will make a difference to the country's economy and international reputation.

Source